Andean Group - 8 March 2005
Crisis over supreme court worsens
Following two massive demonstrations, the resignation of the interior minister and the opposition's threat to set up a parallel congress-in-exile, the government has invited the UN to examine the legality of the country's reconstituted supreme court. At present the country is in political gridlock, thanks largely to the government's decision to replace 27 of the supreme court's 31 judges in December 2004.
On 16 February tens of thousands of demonstrators marched on Quito. The overwhelming majority of demonstrators were protesting against the Gutiérrez administration's increasingly authoritarian tendencies. Despite the cries of "Fuera Lucio!" ("Get out, Lucio"), however, the demonstration was less an attempt to bring down the government than to demand the repeal of its more controversial legislation and in particular, the changes to the supreme court. Twenty-four hours after the march, the protest leaders, the so-called "Quito Assembly" began work on a document detailing the steps the government should take to reinstate institutional democracy. Although the opposition is united in its outrage at the pro-government majority's tampering with the judiciary, it has not yet been able to agree on a way of establishing a new supreme court.
Another resignation
Less than a week later Jaime Damerval, the interior minister, resigned. Damerval, who played an important part in undermining the opposition's attempts to impeach the president in November 2004, is the fourth interior minister to quit the government. The choice of the respected lawyer and columnist on the Partido Social Cristiano (PSC)-leaning daily El Universo initially proved inspired. Having no overt party political links and an aversion to Gutiérrez's personal bête noire, PSC leader León Febres Cordero, on taking up office Damerval announced his purpose was to "try to divide the opposition so that it fails to gather the necessary votes in congress to continue with the impeachment process".
He succeeded handsomely, along with the help of the president's estranged wife, Ximena Bohorquez, Xavier Ledesma, who now takes over as interior minister, and Óscar Ayerve, Ledesma's replacement as minister of the presidency. The two men are credited with forging the government's alliances with the Partido Roldosista Ecuatoriano (PRE) and Partido Renovador Institutional Acción Nacional (Prian). Considering Damerval's centre-right political outlook, his position at the heart of the Gutiérrez administration always seemed incongruous; he had tried to resign once already, at the end of January, but the president had refused to accept it. Unlike his predecessor, Raúl Baca, who stepped down to appease the government's allies, Damerval's letter of resignation attacked the government for its failure to resolve the judicial crisis, to push through its proposal for a referendum on political reform and to pay the local (PSC) government in Guayaquil the money allocated for law and order. Damerval comes from Guayaquil.
While the judicial crisis remains unresolved, Gutiérrez has reiterated his willingness to resort to a "Plan B", involving the stretching of a couple of procedural points dating from the presidency of Gustavo Noboa (2000-2002), to force a referendum on his proposed political reforms if congress refuses to accede to his requests. Damerval's resignation letter expressed his frustration that the government did not turn to that method earlier in order to speed up a referendum on such issues as the reduction in size of congress and the re-election of the president.
Commentators in the local press considered the appointment of Ledesma to the interior ministry and Ayerve to the ministry of the presidency to be a sop to the opposition Izquierda Democrática (ID), which led the march on Quito. Both men were former ID party members and retain links with the party.
As shrewd political operators, both attracted criticism from the pro-impeachment bloc for their authorship of the alliances that have kept the government afloat. Ayerve has even been described as Gutiérrez's "bagman", following rumours that he bribed a number of opposition deputies to abandon the impeachment bloc. One disgruntled former minister, Patricio Acosta, even accused Ayerve of having ordered some hitmen to take him out.
How effective Ledesma will be in the key government post is open to question. His political star had seemed on the wane over the past few months and he has kept a low profile, partly because of some health problems. According to the rumours emanating from Carondolet, the presidential palace, President Gutiérrez had trouble persuading him to take up the position.
- Opinion polls
In a survey conducted by the company Opinion Profiles of 509 people in Quito and Guayaquil, 94.7% of those questioned had "little or no" trust in the country's political parties and 55.3% blamed the government and the opposition equally for the political impasse the country has reached since the government reconstituted the supreme court. As regards Gutiérrez himself, 30.6% described him as "incapable", 16.1% as a "dictator", 7.6% as "intelligent" and 3.3% as "efficient". More than 90% of respondents considered the 100 deputies of the Ecuadorean congress to be doing a bad job.
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ECONOMIC OVERVIEW: ECUADOR
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Domestic demand is booming, judging from the import figures for December
and January. Banks are also beginning to lend again. All this economic
brightness helps to explain why the political chaos has had few consequences.
The problem is that the political crisis must, inevitably, start to tell
on the economy. One early sign of this is that investment expectations,
indicated by companies, are beginning to wilt. What is clear is that the
economy is unlikely to repeat its performance of December 2004 and January
2005. Imports were up by 37%, year-on-year in December and the demand
of fuel and electricity hit a new peak. Electricity demand was 10% up
on December 2003 and this rate continued into January. If this continues
the country's generating capacity will not be able to cope. Unusually,
sales held up in January: usually they fall away after the Christmas boom.
In December credit was a thumping 9% up on the amount for the end of November.
For a dollarised economy 12% interest rates look excessive, but Ecuadoreans
are used to much worse. |